Genting Malaysia; Hold; RM4.39
Price Target: RM4.60; GENM MK

Genting unveiled its Genting Integrated Tourism Plan (GITP) with estimated investment of RM5bn. The investment for the first phase of GITP, scheduled for completion by 2016, will be RM4bn. This includes developments such as: 1) Twentieth Century Fox World theme park consisting of over 25 rides on a 25 acre area (development cost of RM1bn); 2) New 3-star hotel with 1,300 rooms capacity adjacent to First World Hotel; 3) Upgrading of hotels such as Genting Grand, Maxims and First World Hotel; 4) Third arena/hall with 10,000 seating capacity; 5) Second cable car station with 100 gondolas capacity; 6) Genting Premium Outlet in Awana which will be jointly developed with Simon Property Group; 7) Additional retail and F&B outlets; and 8) Various infrastructure and amenities upgrade and refurbishment. Meanwhile, its second phase (RM1bn investment) is still in the planning stage.

The results from GITP will be realized upon completion in 2016. In the near-term, visitor arrivals are expected to be slower with the closure of the outdoor theme park. We maintain our Hold call with SOP-based TP of RM4.60. We value RWG at 11x 2014F EV/EBITDA (25% discount to Macau’s 15x), RWNY at 8x (25% discount to large US operators) and GENUK at 6x (similar to Rank).

Source: HwangDBS Research - 18 Dec 2013